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How Creditors Measure Your Credit Rating
Omar M. Omar
Creditors will measure your credit rating based on the following three main things.
The three "Cs" show creditors your:
The very first question is whether you have sufficient income to repay the debt. Creditors will definitely check to see if your income exceeds your expenses so that you ca comfortably pay the debt. A creditor will then want to know:
The amount remaining from your total net income, after deducting your fixed monthly expenses and other debts, is your capacity. If your net income is $3,000 a month and your total living expenses is $2,500, then your credit capacity is an amount that requires no more than $500 in monthly payments.
If you now pay $400 a month for other credit obligations, then your remaining capacity is a $100 a month, and a creditor should extend you that amount of credit.
There are three techniques that will allow you to maximize your income:
A lender or creditor can be secured or unsecured. Secured lenders hold a lien against specific assets, such as real estate, an automobile, or boat. If you fail to pay, the secured lender can sell the pledged asset to recover debt owed. Secured lenders seldom loan more than the auction value of the collateral.
Secured credit, is an almost guaranteed way to rebuild your credit. Even with poor credit, a lender may advance your credit if you ca secure the credit with a lien against some valuable asset. Many creditors extend credit entirely on the strength of the pledged assets.
Other credit considerations are either ignored or carry comparatively little weight in the credit decision.
What can you use as a collateral to secure your debts and rebuild your credit You may be appreciably wealthier than you think. Add the value of your various assets property that you own and subtract any existing mortgages or lies against those assets. The difference is your equity or net worth in the asset.
This is what you have available to secure a loan. Do not overlook any asset:
You may have other assets to pledge. The point is that collateral gives you a borrowing power approximately equal to your equity in your assets. Regardless of your credit history, if you have collateral worth a solid $100,000, you should be able to borrow close to that amount.
Creditors next consider your character. How important this is depends upon the type of credit, and who your creditors are. Asset based lenders rely chiefly on collateral, and they are less concerned with your character than are unsecured creditors who can only rely on your prior reliability for honoring your obligations.
When creditors check your character, they basically look at how you satisfied your past obligations. Meaning they want to know:
Positive answers to these nine questions will often offset an otherwise negative credit report. Basically your credit character boils down to your credit history in the past. In the eyes of creditors, if your past credit character is good, there is no reason to believe why your future wont look promising.
10 “No Money Down” Ways to Buy Real Estate
Turn the Television on any Sunday morning and you’ll find yourself in the middle of a “how to buy real estate” infomercial. Can you really buy a house with no down payment Can you really make thousands or millions of dollars buying real estate. Of course the answer is “yes” and “no”. The real question is, are you willing to pay anywhere from $500 to $5000 for the information, classes and hotline Most important are you self disciplined enough to follow the program.
You Have To Love The Location, Say These Owners Of Orlando Florida Villas
It has been said that in real estate there are three things that count the most: location, location and location.I recently discovered how powerful this concept can be.
Sniffing Out Mindfulness:Your Nose Knows
A nose is a funny thing.
What The Most Dangerous Job In The World Taught Me About Coping With Stress
I just got through reading some troubling news in the New York Times this morning.
How I Became a Hard Money Lender
Unlike other investors, my venture into real estate was a natural extension of my secondary business as the IP Ware software developer. However, opportunity and perseverance beget wealth, or at least a decent side income.
Moving On: Powerful Tips For Selling Your Home
Maybe youre moving to a larger home to accommodate a growing family, relocating for a new career opportunity, or purchasing a townhouse for retirement.Whatever the reason for the move, youll need to take the necessary steps to sell your home for the best possible price, within a reasonable amount of time.Where do you begin
Getting Pre-Approved for a Home Loan Is One of the Best Ways to Get a Leg Up on the Competition When Shopping for a Home
The real estate market is soaring because of low interest rates that have brought home buying to average Americans.All over the country, more renters are buying and homeowners are upgrading their properties.In this hot seller’s market, a pre-approval letter from your mortgage lender can help you secure a winning bid on the home of your dreams.
Is it time to stop filling your Landlord’s Wallet
Is it time to stop filling your Landlord’s Wallet
Flat Fee MLS Listings - Is this the future of real estate
Realtors are all a buzz about this new form of listing houses on the MLS multiple listing service. Some feel it creates more work for the buyers agent, while others see this as a way to tap into the For Sale By Owner market.
Feed me - Satisfy the Search Engines and Your Sites Visitors With Keyword-Rich Content
Search engines love content. Graphics may make your site look great, but a nice picture does not attract a search engine. Or a searcher for that matter. Good, relevant content does.
Do You Know the 4 Traits that Guarantee Home Business Success
When home business success comes it does not come by luck. In fact, when you analyze the characteristics of the most successful home based business entrepreneurs you start to realize that they all share four key traits in common.
Ethics in Business... A Lost Art
While watching Face the Nation one Sunday earlier this year, Bob Schiffer discussed the airline industry, his mother and ethics in business. Like Bob, I think it is a sad commentary today, that we have to police businesses. Whatever happened to going into business to provide a needed service, being loyal to employees, and keeping promises.
Home Improvement For Ladies
This report is written for those people who may want to improve or update their own home so along those lines, I would like to give you an overview of the factors that may lead you in creating a more effective and successful home improvement project or plan of your own.
Is "Earning a Living" Stopping You
Every year, people resolve that THIS New Year will be different: "This will be the year that I write that book, start that new venture, double my income, take more time off to spend with my family," and the list goes on and on. However, when people think about pursuing their dreams, they often squash the idea because it doesnt seem practical.
Tax Advantages In A Home Business
Every year, several thousand people develop an interest in "going into business."Many of these people have an idea, a product or a service they hope to promote into an in come producing business which they can operate from their own homes.
Why Some People Almost Always Make Money With Investments
Real estate investment takes motivation, drive and ambition on your part if you want to see your hard work turn into a huge profit. If you, yourself dont have the enthusiasm, chances are, your real estate investment days wont last long or make you much money. But, if you do, the possibilities are endless and so is your financial gain.
The Logic of Emotion!
Homebuyers are an interesting study. Watching people make their home buying decisions has brought me to the conclusion that every decision that every one of us makes is based in emotion. You heard me, its all about the emotion. Before you deny what I am describing to you, let me begin with me.
Private Mortgage Insurance PMI
If your down payment on a home is less than 20 percent of the appraised value or sale price, you must obtain private mortgage insurance, known as PMI, with your lender. This will enable you to obtain a mortgage with a lower down payment because your lender is now protected against any default on the loan.
Internet News Services Explode Online
It seems no matter how much information comes available online, people thirst for more.
Its The Same Deal For Both Search Engines And Real Estate
Its all about location, location, location!
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